summary of consolidated financial results for fy2012 · 2017-03-17 · 1．consolidated financial...

This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation.

Summary of Consolidated Financial Results for FY2012

(January 1, 2012 - December 31, 2012) February 13, 2013

Company Name: Shimano Inc. Stock Exchange: Tokyo and Osaka, First Section Code Number: 7309 URL: http://www.shimano.com President: Yozo Shimano Senior Vice President, Accounting: Yoshihiro Hirata Telephone: +81-72-223-3254 Date of Shareholders’ Meeting: March 28, 2013 Scheduled payment date for dividends: March 29, 2013Date of filing of annual report to Ministry of Finance: March 29, 2013 Supplemental information: Yes Financial results briefing: Yes

(Amounts are rounded down to the nearest million yen.)

1．Consolidated financial results for FY2012 (January 1, 2012 - December 31, 2012) (1) Consolidated income information (The percentages represent the rates of increase (decrease) compared to the corresponding prior period.)

Net sales Operating income Ordinary income Net income Million yen % Million yen % Million yen % Million yen %

FY2012 245,843 10.9 40,961 29.0 39,539 24.7 27,487 38.4FY2011 221,770 3.8 31,742 (3.1) 31,701 14.2 19,862 3.9

(Note) Comprehensive income: FY2012: 44,792 million yen (216.1%) FY2011: 14,170 million yen (-18.4%)

Net income per share (Basic)

Net income per share (Diluted)

Return on shareholders’ equity

Ordinary income to total assets

Operating income to net sales

Yen Yen % % % FY2012 296.50 － 13.9 16.7 16.7 FY2011 211.83 － 11.2 15.1 14.3

(Reference) Equity in earnings: FY2012: － million yen FY2011: － million yen (2) Consolidated balance sheet information

Total assets Net assets Shareholders’ equity ratio Net assets per share Million yen Million yen % Yen

FY2012 257,707 216,364 83.7 2,326.13 FY2011 216,000 181,774 83.9 1,932.32

(Reference) Shareholders’ equity FY2012: 215,648 million yen FY2011: 181,189 million yen (3) Consolidated cash flow information

Cash flows from operating

activities Cash flows from investing

activities Cash flows from financing

activities Cash and cash equivalents

at end of year Million yen Million yen Million yen Million yen

FY2012 38,187 (18,928) (11,083) 94,809 FY2011 25,484 (9,521) 17 78,549

2. Dividend information

Dividend per share Total dividend

(Annual) Dividend payout ratio

(Consolidated) Dividend per shareholders’

equity (Consolidated) 1st

Quarter 2nd

Quarter 3rd

Quarter Year-end Total

Yen Yen Yen Yen Yen Million yen % % FY2011 － 30.50 － 30.50 61.00 5,719 28.8 3.2 FY2012 － 37.50 － 37.50 75.00 6,953 25.3 3.5

FY2013 (Forecast) － 37.50 － 37.50 75.00 23.6 (Note) The year-end cash dividend for FY2012 included a special dividend of 31.25 yen. 3. Forecasted consolidated business performance for FY2013 (January 1, 2013 - December 31, 2013)

Net sales Operating income Ordinary income Net income Net income per share Million yen % Million yen % Million yen % Million yen % Yen

First half of FY2013 125,000 1.6 21,000 (4.0) 21,000 (3.2) 14,500 (4.9) 156.41FY2013 255,000 3.7 43,000 5.0 43,000 8.8 29,500 7.3 318.21

The percentages represent the rates of increase (decrease) compared to the corresponding prior period.

*Notes (1) Change in significant subsidiaries during the year (Changes in specified subsidiaries due to changes in scope of consolidation): None (2) Changes in accounting policies, changes in accounting estimates, and retrospective restatement: ① Changes in accounting policies in accordance with revision of accounting standards: None ② Changes in accounting policies other than ① above: None ③ Changes in accounting estimates: None ④ Retrospective restatement: None (3) Number of shares of common stock issued ① Number of shares of common stock issued at year-end (including treasury stock): FY2012: 92,720,000 FY2011: 93,800,000 ② Number of shares of treasury stock at year-end: FY2012: 13,134 FY2011: 32,168 ③ Average number of shares during the year: FY2012: 92,707,257 FY2011: 93,768,075

Presentation concerning audit procedures This financial report is outside the scope of audit procedures pursuant to the Financial Instruments and Exchange Act and procedures for audit of financial statements pursuant to the Financial Instruments and Exchange Act were not completed as of the disclosure of this financial report. Explanation regarding the appropriate use of forecasts of business performance and other special items The forecasts of consolidated business performance and other forward-looking statements contained in this document are based on information currently available to the Company and certain assumptions that management believes reasonable and actual business performance may differ materially from those described in such statements due to various factors. For details of assumptions for the forecasts and other related items, please refer to Page 3 of the attached document. Shimano Inc. accepts no liability whatsoever for any direct or consequential loss arising from any use of this document.

Shimano Inc. (7309) Summary of Consolidated Financial Results for FY2012

○Table of contents of the attached document

1. Business Results .................................................................................................................................................. 2 (1) Analysis of Consolidated Business Results................................................................................................... 2 (2) Analysis of Consolidated Financial Position ............................................................................................... 3 (3) Dividend Policy and Cash Dividends for FY2012 and FY2013 ................................................................ 4

2. Outline of the Group ......................................................................................................................................... 5

3. Business Policy ................................................................................................................................................... 6

4. Consolidated Financial Statements ...................................................................................................................... 7 (1) Consolidated Balance Sheets ...................................................................................................................... 7 (2) Consolidated Statements of Income and Comprehensive Income ............................................................... 9 (3) Consolidated Statements of Shareholders’ Equity ...................................................................................... 11 (4) Consolidated Statements of Cash Flows .................................................................................................... 13 (5) Note concerning Assumption of Going Concern ....................................................................................... 15 (6) Preparation of the Consolidated Financial Statements - Significant Matters ............................................ 15 (7) Changes in the “Preparation of the Consolidated Financial Statements - Significant Matters” ................. 17 (8) Notes relating to Consolidated Financial Statements ................................................................................ 19 (Notes relating to Consolidated Balance Sheets) ................................................................................ 19 (Notes relating to Consolidated Statements of Income) ..................................................................... 19 (Notes relating to Consolidated Statements of Shareholders’ Equity) ............................................... 19

(Notes relating to Consolidated Statements of Cash Flows) .............................................................. 21 (Notes relating to Securities) .............................................................................................................. 21 (Notes relating to Deferred Tax Accounting) ..................................................................................... 22 (Segment Information) ....................................................................................................................... 24

(Per Share Data) .................................................................................................................................. 26(Significant Subsequent Events) ......................................................................................................... 26

5. Non-consolidated Financial Statements ............................................................................................................. 27 (1) Non-consolidated Balance Sheets ............................................................................................................... 27 (2) Non-consolidated Statements of Income .................................................................................................... 29 (3) Non-consolidated Statements of Shareholders’ Equity .............................................................................. 30 (4) Note concerning Assumption of Going Concern ........................................................................................ 32 (5) Changes in the Significant Accounting Policies ......................................................................................... 32 (6) Notes relating to Non-consolidated Financial Statements .......................................................................... 33 (Notes relating to Non-consolidated Balance Sheets) ......................................................................... 33 (Notes relating to Non-consolidated Statements of Income) .............................................................. 33 (Notes relating to Deferred Tax Accounting) ................................................................................... 33


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1. Business Results (1) Analysis of Consolidated Business Results ① Review of Operations

During fiscal year 2012, the sovereign debt crisis became more acute in Europe. In the U.S., meanwhile, concerns mounted about a possible decline in consumption as the fiscal cliff loomed ever nearer. Therefore, the slowing of economic growth rates across both the developed and the emerging countries became more pronounced, especially in the latter half of 2012. Although the Japanese economy showed signs of a modest recovery underpinned by demand associated with

reconstruction in the aftermath of the Great East Japan Earthquake, the yen’s persisting strength and anxiety about electricity supply constraints led to a challenging business environment. As a result, net sales increased 10.9% from the previous year to 245,843 million yen. Operating income

increased 29.0% to 40,961 million yen, ordinary income increased 24.7% to 39,539 million yen, and net income increased 38.4% to 27,487 million yen.

Reportable Segment Overview

Bicycle Components

In Europe, a major market for Shimano products, retail sales remained at virtually the same level as for the previous year despite changeable weather, namely, the warm winter, unsettled weather in the spring, and fine weather from late July onward. In North America, sales continued to be above the previous year’s level, following buoyant sales thanks to the mild winter and stable spring weather. The market for sports bicycles in China, having surged in the previous year, somewhat lost momentum but continued to grow at a stable pace. As a result, the sales exceeded the previous year’s level. In Southeast Asia and South America, overall demand for sports bicycles grew despite unsettled weather and a less buoyant economy in Indonesia. Meanwhile, retail sales in Japan remained lackluster. In these market conditions, shipments from Shimano proceeded virtually as scheduled. New models,

including the SLX mountain bike components, the SORA road bike components, and the Tourney A070, which were introduced in the second quarter, and the DURA ACE top-of-the-line road bike components and the Deore LX trekking bike components, which debuted in the third quarter, gained a favorable reputation in the market. As a result, sales from this segment increased 11.8% from the previous year to 198,190 million yen, and

operating income increased 30.2% to 39,012 million yen.

Fishing Tackle The Japanese market got off to a slow start due to unusually heavy snowfall and cold waves. Moreover, the

Japanese archipelago was battered by an unseasonal typhoon in June, having not suffered one for the last eight years. Japan experienced prolonged unsettled weather, including record rainfall and a powerful typhoon during the summer. The sales environment remained challenging throughout the year, except for a temporary upturn in retail sales during the autumn thanks to an abundance of fish to catch. However, new Shimano products, including electric reels, high-end spinning reels, and bait casting reels for lure fishing, gained a favorable reputation. Sales of fishing tackle in Japan exceeded the previous year’s level partly because orders received for fishing tackle for lure fishing remained robust throughout the year. Meanwhile, a tough business environment persisted overseas, reflecting the impact of the strong yen

throughout the year, heat waves and hurricane damage in North America, and an economic downturn in Europe triggered by the sovereign debt crisis. Nevertheless, total sales in overseas markets increased, assisted by continued brisk sales in Oceania. As a result, sales from this segment increased 7.6% from the previous year to 47,234 million yen, and

operating income increased 6.4% to 2,274 million yen.

Others Sales from other segments decreased 27.6% from the previous year to 419 million yen and an operating

loss of 326 million yen was recorded, following an operating loss of 363 million yen the previous year.


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② Forecast for Fiscal Year 2013

Although the EU nations started negotiating on measures to support countries in the grip of the sovereign debt crisis, the European economies have yet to find a way of extricating themselves from the malaise. Uncertainties about fiscal policies in the U.S. make skeptical whether a recovery of consumption is likely to happen soon. With respect to the emerging countries, China and the ASEAN countries are affected by the economic downturn across Europe, a region that is the principal destination for their exports. These conditions are expected to continue.

The Japanese economy may experience a temporary upturn due to emergency measures to stimulate the economy and a bulge in demand before the consumption tax rate increases. However, protracted sluggishness of overseas economies, uncertain prospects for foreign currency exchange rates, and anxiety about electricity supply pose a downside risk to the Japanese economy.

In these circumstances, the Shimano Group, while closely monitoring economic trends in Japan and overseas, is endeavoring to further enhance management efficiency. We will take the lead in the creation of new cycling culture and new sport fishing culture.

In view of the outlook described above, for the fiscal year ending December 2013, the Shimano Group forecasts net sales of 255,000 million yen, an increase of 3.7%, operating income of 43,000 million yen, an increase of 5.0%, ordinary income of 43,000 million yen, an increase of 8.8%, and net income of 29,500 million yen, an increase of 7.3%.

Sales forecasts by segment are indicated below. (Millions of yen)

First half Second half Full year Amount % Amount % Amount %

Bic

ycle

com

pone

nts

Japan 3,000 2.4 3,500 2.7 6,500 2.5

Overseas 97,000 77.3 103,100 79.6 200,100 78.5

Sub-total 100,000 79.7 106,600 82.3 206,600 81.0

Fishing tackle 25,300 20.2 22,700 17.5 48,000 18.8

Others 200 0.2 200 0.2 400 0.2

Total 125,500 100.0 129,500 100.0 255,000 100.0

(2) Analysis of Consolidated Financial Position ① Assets, Liabilities and Net Assets

(Total assets) Total assets as of the end of fiscal year 2012 amounted to 257,707 million yen (an increase of 41,707 million

yen compared with the figure as of the previous fiscal year-end). This increase was primarily due to an increase of 14,278 million yen in property, plant and equipment, an increase of 12,698 million yen in cash and time deposits and an increase of 6,344 million yen in merchandise and finished goods. (Total liabilities)

Total liabilities as of the end of fiscal year 2012 amounted to 41,342 million yen (an increase of 7,116 million yen compared with the figure as of the previous fiscal year-end). This increase was primarily due to an increase of 2,974 million yen in income taxes payable and an increase of 2,411 million yen in accounts payable-trade. (Net assets)

Net assets as of the end of fiscal year 2012 amounted to 216,364 million yen (an increase of 34,590 million yen compared with the figure as of the previous fiscal year-end). This increase was primarily due to an increase of 17,211 million yen in retained earnings and an increase of 16,305 million yen in foreign currency translation adjustments.


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② Cash Flows Net cash provided by operating activities amounted to 38,187 million yen compared with 25,484 million yen

for the previous year. The main items were income before income taxes of 38,477 million yen, depreciation and amortization amounting to 10,222 million yen and income taxes paid amounting to 8,892 million yen.

Net cash used in investing activities amounted to 18,928 million yen compared with 9,521 million yen for the previous year. The main items included acquisition of property, plant and equipment amounting to 21,306 million yen.

Net cash used in financing activities amounted to 11,083 million yen compared to 17 million yen for the previous year. The main items were cash dividend to shareholders amounting to 6,336 million yen and acquisition of treasury stock amounting to 3,863 million yen.

As a result, cash and cash equivalents at the end of the year were 94,809 million yen.

Cash flow indicators are shown in the following table.

FY2008 FY2009 FY2010 FY2011 FY2012 Equity ratio (%) 85.4 87.0 84.3 83.9 83.7 Market value equity ratio (%) 174.2 185.0 188.7 162.4 198.6 Interest-bearing debt to cash flow ratio (%) 0.25 0.06 0.06 0.30 0.20 Interest coverage ratio (times) 45.7 81.9 93.6 87.1 115.4 Notes) 1. Each indicator is calculated using the consolidated results based on the formula indicated below:

Equity ratio: Shareholders' equity / Total assets Market value equity ratio: Total market capitalization / Total assets Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flow Interest coverage ratio: Operating cash flow / Interest paid

2. Total market capitalization is calculated by: Closing stock price on the last day of the fiscal year x The number of shares of common stock issued and outstanding at the end of the fiscal year, less treasury stock.

3. Interest-bearing debt covers all debt in the consolidated balance sheet for which interest is paid. 4. Cash flows from operating activities and the amount of interest payments stated in the consolidated statements of cash flows

are used as operating cash flow and interest paid. (3) Dividend Policy and Cash Dividends for FY2012 and FY2013

The Company considers the return of earnings to shareholders to be one of the most important issues for management. The Company’s basic policy is to continue providing stable returns reflecting overall business performance and strategy. In accordance with the above policy, the Company intends to pay out year-end cash dividends of 37.50 yen per share, which include a special dividend of 31.25 yen, an increase of 7 yen from the amount paid for the previous year. As a result, cash dividends for the full year of fiscal year 2012 will amount to 75 yen per share, an increase of 14 yen from the amount paid for the previous year. The Company intends to pay out cash dividends of 75 yen per share for fiscal year 2013 (37.50 yen for both interim and year-end cash dividend).


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2. Outline of the Group

Innovative Textiles, Inc. *1

Holding companies

*1: Consolidated subsidiaries

*2: A newly consolidated subsidiary from fiscal year 2012. (Refer to Page 15.)

*3: The company name was changed in fiscal year 2012. (Refer to Page 15.)

Arex Precision Manufacturing (Malaysia)Sdn. Bhd.Peninsula Precision Stamping (Malaysia)Sdn. Bhd.

Subsidiaries

Shimano Oceania Holdings Pty. Ltd. *1*3

G.Loomis, Inc. *1

Subsidiaries

Shimano (Lianyungang) Industrial Co.,Ltd.*1

Shimano (Cambodia) Co.,Ltd. *1 Subsidiaries

Shimano Europe Holding B.V. *1

P.T. Shimano Batam *1

MSC Pte. Ltd. *1 Shimano Sales Co., Ltd.*1

Affiliates

Shimano Australia Fishing Pty. Ltd.*1*3

FBM Co., Ltd.

Subsidiaries Subsidiary

Shimano (Malaysia) Sdn. Bhd.*1 Shimano Adachi Co., Ltd

Shimano (Singapore) Pte. Ltd.*1 Shimano Kumamoto Co., Ltd. *1

Shimano Components (Malaysia) Sdn.Bhd.*1

Shimano (Kunshan) Fishing Tackle Co.,Ltd. *1

Shimano (Mersing) Sdn. Bhd.*1

Bicycle components Fishing tackle Others

Subsidiaries Subsidiaries

Shimano Inc.

Shimano (Kunshan) BicycleComponents Co., Ltd.*1

Shimano Italia S.p.A. in liquidazione *1 Sanbo Co., Ltd.

Shimano (Tianjin) Bicycle ComponentsCo., Ltd.*1 Shimano Czech Republic s.r.o.*1

The Shimano Group consists of Shimano Inc. and 43 consolidated subsidiaries and affiliates. The Group ismainly engaged in manufacturing and sales of bicycle components and fishing tackle. Business relationships among the Shimano Group companies are indicated below.

Customers

Subsidiaries

Subsidiaries Subsidiaries Affiliate

Shimano American Corporation *1

DashAmerica, Inc.(Pearl Izumi USA) *1

Shimano (Shanghai) Sales Corporation *1

Shimano Polska Bicycle Parts sp. z o.o.*1

Shimano Belgium N.V. *1

Shimano Italy Fishing S.r.l. *1

Shimano France Composants CyclesS.A.S. *1

Bikefitting Holding B.V. *1*2

Shimano Nordic Cycle AS *1

Shimano Nordic Cycle OY *1

Shimano Nordic Cycle AB *1

Pearl Izumi GmbH *1

Shimano Oceania Ltd. *1

Shimano Canada Ltd. *1

Shimano Europe Bike Holding B.V. *1

Shimano Europe Fishing Holding B.V. *1

Shimano Germany Fishing GmbH *1

Shimano Benelux B.V. *1

Shimano Europe B.V. *1

Bikefitting.com B.V. *1*2

Shimano Australia Cycling Pty. Ltd.　*1*3

Shimano Latin America RepresentacaoComercial Ltda. *1

Shimano Taiwan Co., Ltd. *1


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3. Business Policy Since no significant changes have been made to the information for management policies in the Summary of Consolidated Financial Results for FY2011 disclosed on February 8, 2012, disclosure of the management policies has been omitted.

The Summary of Consolidated Financial Results for FY2011 is available at the following URL. ・Shimano Website http://www.shimano.com ・Tokyo Stock Exchange Website (Listed Company Information Search) http://www.tse.or.jp/listing/compsearch/index.html


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4. Consolidated Financial Statements

(1) Consolidated Balance Sheets (Millions of yen)

FY2011 As of Dec. 31, 2011

FY2012 As of Dec. 31, 2012

Assets Current assets Cash and time deposits 82,252 94,950 Notes and accounts receivable-trade *2 25,189 *2 27,845 Merchandise and finished goods 19,269 25,613 Work in process 14,971 17,209 Raw materials and supplies 4,419 5,091 Deferred income taxes 1,878 2,232 Others 3,168 3,090 Allowance for doubtful accounts (306) (236) Total current assets 150,842 175,798 Fixed assets Property, plant and equipment Buildings and structures 39,974 48,757 Accumulated depreciation (22,773) (24,102) Accumulated impairment loss (154) (155) Buildings and structures (net) 17,046 24,499 Machinery and vehicles 44,943 52,061 Accumulated depreciation (33,720) (37,394) Accumulated impairment loss (191) (173) Machinery and vehicles (net) 11,031 14,493 Land 11,152 11,256 Leased assets 107 489 Accumulated depreciation (59) (57) Leased assets (net) 47 431 Construction in progress 3,733 5,800 Others 36,712 40,226 Accumulated depreciation (32,905) (35,612) Accumulated impairment loss (22) (19) Others (net) 3,784 4,594 Total property, plant and equipment 46,797 61,076 Intangible assets Goodwill 3,737 3,727 Software 1,610 1,916 Others 2,758 3,446 Total intangible assets 8,106 9,090 Investments and other assets Investment securities *1 6,714 *1 8,569 Deferred income taxes 1,472 1,058 Others 2,554 2,602 Allowance for doubtful accounts (488) (488) Total investments and other assets 10,253 11,742 Total fixed assets 65,157 81,908 Total assets 216,000 257,707


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(Millions of yen)

FY2011 As of Dec. 31, 2011

FY2012 As of Dec. 31, 2012

Liabilities Current liabilities Accounts payable-trade 7,750 10,161 Short-term loans payable 4,136 5,915 Income taxes payable 3,608 6,582 Deferred income taxes 298 222 Accrued employee bonuses 1,217 1,268 Accrued officer bonuses 161 193 Others 9,631 11,321 Total current liabilities 26,803 35,665 Long-term liabilities Long-term loans payable 2,928 1,070 Deferred income taxes 784 742 Employee retirement benefits 2,425 2,681 Officer retirement benefits 1,130 －

Others 152 1,182 Total long-term liabilities 7,422 5,677 Total liabilities 34,225 41,342

Net assets Shareholders’ equity Common stock 35,613 35,613 Capital surplus 5,822 5,822 Retained earnings 159,597 176,808 Treasury stock (124) (47) Total shareholders’ equity 200,908 218,197 Other accumulated comprehensive income Unrealized gain (loss) on other securities 47 913 Foreign currency translation adjustments (19,767) (3,462) Total other accumulated comprehensive income (19,719) (2,548) Minority interests 584 716 Total net assets 181,774 216,364

Total liabilities and net assets 216,000 257,707


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(2) Consolidated Statements of Income and Comprehensive Income Consolidated Statements of Income

(Millions of yen)

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012 to Dec. 31, 2012

Net sales 221,770 245,843Cost of sales *2 144,884 *2 156,711

Gross profit 76,885 89,132Selling, general and administrative expenses *1, *2 45,143 *1, *2 48,171

Operating income 31,742 40,961Non-operating income Interest income 690 743 Dividend income 512 318 Others 423 583

Total non-operating income 1,626 1,645Non-operating expenses Interest expenses 292 334 Loss on disposal of fixed assets 157 135 Foreign exchange losses 296 2,291 Others 920 306

Total non-operating expenses 1,666 3,066Ordinary income 31,701 39,539

Extraordinary Losses Loss on revaluation of investment securities 1,430 －

Loss on factory reconstruction 715 1,061

Total extraordinary losses 2,145 1,061

Income before income taxes and minority interests 29,555 38,477Income taxes - current 9,005 11,471Income taxes - deferred 606 (542)

Total income taxes 9,612 10,929Income before minority interests 19,943 27,548

Minority interests in net income 81 60Net income 19,862 27,487


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Consolidated Statements of Comprehensive Income (Millions of yen)

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012 to Dec. 31, 2012

Income before minority interests 19,943 27,548Other comprehensive income

Unrealized gain (loss) on other securities 169 865 Foreign currency translation adjustments (5,943) 16,377 Total other comprehensive income (5,773) 17,243Comprehensive income 14,170 44,792 (Breakdown)

Comprehensive income attributable to owners of the parent 14,133 44,658 Comprehensive income attributable to minority interests 37 133


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(3) Consolidated Statements of Shareholders’ Equity (Millions of yen)

FY2011

Jan. 1, 2011 to Dec. 31,2011

FY2012 Jan. 1, 2012 to Dec. 31, 2012

Shareholders’ equity Common stock Balance at beginning of year 35,613 35,613 Balance at end of year 35,613 35,613 Capital surplus Balance at beginning of year 5,822 5,822 Changes of items during the year Sales of treasury stock 0 0 Retirement of treasury stock － (0) Total changes of items during the year 0 (0) Balance at end of year 5,822 5,822 Retained earnings Balance at beginning of year 145,661 159,597 Changes of items during the year Cash dividends paid (5,719) (6,336) Net income 19,862 27,487 Retirement of treasury stock － (3,939) Change of scope of consolidation (206) －

Total changes of items during the year 13,936 17,211 Balance at end of year 159,597 176,808 Treasury stock Balance at beginning of year (121) (124) Changes of items during the year Acquisition of treasury stock (2) (3,863) Sales of treasury stock 0 0 Retirement of treasury stock － 3,939 Total changes of items during the year (2) 76 Balance at end of year (124) (47) Total shareholders’ equity Balance at beginning of year 186,974 200,908 Changes of items during the year Cash dividends paid (5,719) (6,336) Net income 19,862 27,487 Acquisition of treasury stock (2) (3,863) Sales of treasury stock 0 0 Change of scope of consolidation (206) －

Total changes of items during the year 13,933 17,288 Balance at end of year 200,908 218,197


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(Millions of yen)

FY2011

Jan. 1, 2011 to Dec. 31,2011

FY2012 Jan. 1, 2012 to Dec. 31, 2012

Other comprehensive income Unrealized gain (loss) on other securities Balance at beginning of year (122) 47 Changes of items during the year Net changes of items other than shareholders’ equity 169 865 Total changes of items during the year 169 865 Balance at beginning of year 47 913 Foreign currency translation adjustments Balance at beginning of year (13,867) (19,767) Changes of items during the year Net changes of items other than shareholders’ equity (5,899) 16,305 Total changes of items during the year (5,899) 16,305 Balance at end of year (19,767) (3,462) Total other comprehensive income Balance at beginning of year (13,990) (19,719) Changes of items during the year Net changes of items other than shareholders’ equity (5,729) 17,170 Total changes of items during the year (5,729) 17,170 Balance at end of year (19,719) (2,548)Minority interest Balance at beginning of year 615 584 Changes of items during the year Net changes of items other than shareholders’ equity (31) 131 Total changes of items during the year (31) 131 Balance at end of year 584 716Total net assets Balance at beginning of year 173,600 181,774 Changes of items during the year Cash dividends paid (5,719) (6,336) Net income 19,862 27,487 Acquisition of treasury stock (2) (3,863) Sales of treasury stock 0 0 Change of scope of consolidation (206) －

Net changes of items other than shareholders’ equity (5,760) 17,301 Total changes of items during the year 8,173 34,590 Balance at end of year 181,774 216,364


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(4) Consolidated Statements of Cash Flows

(Millions of yen)

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012 to Dec. 31, 2012

Cash flows from operating activities: Income before income taxes and minority interests 29,555 38,477 Depreciation and amortization 9,925 10,222 Allowance for doubtful accounts (121) (86) Interest and dividend income (1,202) (1,062) Interest expenses 292 334 Foreign exchange gains/losses (141) 2,006 Notes and accounts receivable (11) (1,271) Inventories (3,390) (5,360) Accounts payable (554) 1,520 Officer retirement benefits 130 (1,130) Employee retirement benefits 165 223 Loss on sales/revaluation of investment securities 1,344 －

Gain on sales/disposal of fixed assets 294 494 Others, net (133) 1,928 Subtotal 36,153 46,295 Interest and dividend income received 1,181 1,114 Interest expenses paid (292) (330) Income taxes paid (11,558) (8,892) Net cash provided by operating activities 25,484 38,187Cash flows from investing activities： Purchases of time deposits (6,736) (1,060) Proceeds from maturities of time deposits 10,185 4,522 Acquisition of property, plant and equipment (12,383) (21,306) Proceeds from sales of fixed assets 231 198 Acquisition of intangible assets (668) (1,523) Proceeds from sales of investment securities 72 4 Acquisition of investment securities (0) (300) Increase in short-term loans receivable 42 15 Payments for acquisition of newly consolidated subsidiaries (394) (130) Payments for sales of consolidated subsidiaries (258) －

Others, net 388 652 Net cash used in investing activities (9,521) (18,928)


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(Millions of yen)

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012 to Dec. 31, 2012

Cash flows from financing activities: Increase in short-term loans payable 1,714 769 Proceeds from long-term loans payable 3,996 －

Repayment of long-term loans payable (34) (1,595) Repayments of finance lease obligations (18) (54) Acquisition of treasury stock (2) (3,863) Gain on sales of treasury stock 0 0 Cash dividends to shareholders (5,594) (6,336) Cash dividends to minority shareholders (43) (3) Net cash provided by (used in) financing activities 17 (11,083)Effect of exchange rate changes on cash and cash equivalents (2,539) 8,084Net increase (decrease) in cash and cash equivalents 13,441 16,259Cash and cash equivalents at beginning of year 65,107 78,549Cash and cash equivalents at end of year * 78,549 * 94,809


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(5) Note concerning Assumption of Going Concern Not applicable.

(6) Preparation of the Consolidated Financial Statements - Significant Matters

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012 1. Consolidation The consolidated financial statements include the

accounts of the Company and the 41 subsidiaries whose names are stated on “2. Outline of the Group” on Page 5 of the Attachment. Shimano (Cambodia) Co., Ltd. was included in the scope of consolidation during fiscal year 2011, due to acquisitions of shares. Shimano U.K. Ltd. was excluded from the scope of consolidation during fiscal year 2011, due to sales of shares. The company name of Shimano (Shanghai) Bicycle Components Co. Ltd. was changed to Shimano (Shanghai) Sales Corporation during fiscal year 2011.

The consolidated financial statements include the accounts of the Company and the 43 subsidiaries whose names are stated on “2. Outline of the Group” on Page 5 of the Attachment. Bikefitting Holding B.V. and Bikefitting.com B.V. were included in the scope of consolidation during fiscal year 2012, due to acquisitions of shares. The company name of Shimano Australia Pty. Ltd. was changed to Shimano Australia Cycling Pty. Ltd., Dunphy Sports/Fishing Imports Pty. Ltd. was changed to Shimano Australia Fishing Pty. Ltd. and Dunphy Holdings Pty. Ltd. was changed to Shimano Oceania Holdings Pty. Ltd. during fiscal year 2012.


15

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012 3. Fiscal year of the

consolidated subsidiaries

Shimano American Corporation. Shimano Canada Ltd. G.Loomis, Inc. Innovative Textiles, Inc. DashAmerica, Inc. (Pearl Izumi USA) Pearl Izumi GmbH Shimano Europe Holding B.V. Shimano Europe Bike Holding B.V. Shimano Europe Fishing Holding B.V. Shimano Germany Fishing GmbH Shimano Benelux B.V. Shimano Europe B.V. Shimano France Composants Cycles S.A.S. Shimano Italia S.p.A. in liquidazione Shimano Italy Fishing S.r.l. Shimano Belgium N.V. Shimano Nordic Cycle AB Shimano Nordic Cycle OY Shimano Nordic Cycle AS Shimano Polska Bicycle Parts Sp. z o. o. Dunphy Holdings Pty. Ltd. Dunphy Sports/Fishing Imports Pty. Ltd. Shimano (Singapore) Pte. Ltd. Shimano Components (Malaysia) Sdn. Bhd. Shimano (Mersing) Sdn. Bhd. P.T.Shimano Batam Shimano (Malaysia) Sdn. Bhd. MSC Pte. Ltd. The fiscal years of the above foreign subsidiaries end on November 30 and their financial statements at November 30 are used for preparation of the consolidated financial statements. Any material effects occurring during the period from December 1 to December 31 are adjusted in the consolidated financial statements. Shimano Czech Republic s.r.o. has changed its fiscal year end from November 30 to December 31 during fiscal year 2011. Its financial statement used for preparation of the consolidated financial statements for fiscal year 2011 is for a 13-month period. The impact of this change is immaterial.

Shimano American Corporation. Shimano Canada Ltd. G.Loomis, Inc. Innovative Textiles, Inc. DashAmerica, Inc. (Pearl Izumi USA) Pearl Izumi GmbH Shimano Europe Holding B.V. Shimano Europe Bike Holding B.V. Shimano Europe Fishing Holding B.V. Shimano Germany Fishing GmbH Shimano Benelux B.V. Shimano Europe B.V. Shimano France Composants Cycles S.A.S. Shimano Italy Fishing S.r.l. Shimano Belgium N.V. Shimano Nordic Cycle AB Shimano Nordic Cycle OY Shimano Nordic Cycle AS Shimano Polska Bicycle Parts Sp. z o. o. Shimano Oceania Holdings Pty. Ltd. Shimano Australia Fishing Pty. Ltd. Shimano (Singapore) Pte. Ltd. Shimano Components (Malaysia) Sdn. Bhd. Shimano (Mersing) Sdn. Bhd. P.T.Shimano Batam Shimano (Malaysia) Sdn. Bhd. MSC Pte. Ltd. The above foreign subsidiaries have changed their fiscal year end from November 30 to December 31 during fiscal year 2012. Their financial statements used for preparation of the consolidated financial statements for fiscal year 2012 are for a 13-month period. As a result, net sales increased 2,858 million yen, operating income increased 1,591 million yen, ordinary income increased 1,719 million yen, and income before income taxes and minority interests increased 1,719 million yen. The fiscal year of Shimano Italia S.p.A. in liquidazione ends on November 30 and its financial statements at November 30 are used for preparation of the consolidated financial statements. Any material effects occurring during the period from December 1 to December 31 are adjusted in the consolidated financial statements.


16

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012 4. Summary of

significant accounting policies

(2) Depreciation and amortization of principal fixed assets

Leased Assets

―――

Leased Assets Leased assets related to financial lease transactions with ownership transfer The Group has adopted the same depreciation method for the leased assets and the depreciable assets that are owned.

Since no significant changes have been made to the information in the recent securities report (submitted on March 30, 2012) for items other than the above 1, 3 and 4, disclosure of other items has been omitted.

(7) Changes in the “Preparation of the Consolidated Financial Statements - Significant Matters” FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012

(Adoption of the “Accounting Standard for Asset Retirement Obligations”)

Effective from fiscal year 2011, the Group has adopted the “Accounting Standard for Asset Retirement Obligations” (Accounting Standards Board of Japan (ASBJ) Statement No. 18, March 31, 2008) and the “Guidance on Accounting Standard for Asset Retirement Obligations” (ASBJ Guidance No. 21, March 31, 2008). The impact of this change on the consolidated financial statements is immaterial.

(Adoption of the “Accounting Standards for Business Combinations” and related matters)

Effective from fiscal year 2011, the Group has adopted the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, December 26, 2008), the “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, December 26, 2008), the “Partial Amendments to Accounting Standard for Research and Development Costs” (ASBJ Statement No. 23, December 26, 2008), the “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, December 26, 2008), the “Accounting Standard for Equity Method of Accounting for investments” (ASBJ Statement No. 16, December 26, 2008) and the “Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, December 26, 2008).

―――

―――


17

Changes in presentation FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012

(Consolidated Statements of Income)

In accordance with the adoption of the “Cabinet Office Ordinance Partially Revising Regulation for Terminology, Forms and Preparation of Financial Statements” (Cabinet Office Ordinance No. 5, March 24, 2009) based on the “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, December 26, 2008), “Income before minority interests” was presented for fiscal year 2011.

―――

―――

(Consolidated Statements of Cash Flows)

“Foreign exchange gain/loss”, which was included in “Others” under “Cash flow from operating activities”, was separately presented for fiscal year 2012 due to increased materiality. The Consolidated Statements of Cash Flows for the previous fiscal year was reclassified due to change in presentation.

As a result, 274 million yen included in “Other” under “Cash flow from operating activities” was reclassified as “Foreign exchange gain/loss” of 141 million yen and “Others” of 133 million yen.

Additional information FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012

―――

―――

(Adoption of the “Accounting Standard for Presentation of Comprehensive Income”)

Effective from fiscal year 2011, the Group has adopted the “Accounting Standard for Presentation of Comprehensive Income” (ASBJ Statement No. 25, June 30, 2010). The amounts of “Other accumulated comprehensive income” and “Total other accumulated comprehensive income” stated for fiscal year 2010 are the amounts of “Valuation and translation adjustments” and “Total valuation and translation adjustments.”

(Adoption of the “Accounting Standard for Accounting Changes and Error Corrections” and related matters)

The Group has adopted the “Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Statement No. 24, December 4, 2009) and the “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24, December 4, 2009) for accounting changes and error corrections made after the beginning of fiscal year 2012

(Abolition of the Officer Retirement Benefit Plan)

The Company and two domestic subsidiaries have resolved at their respective General Meetings of Shareholders held in March 2012 to abolish the officer retirement benefit plan and grant the retirement benefits. Accordingly, the officer retirement benefits payable amounting to 663 million yen is presented in “Others” under “Long-term liabilities.”

―――


18

(8) Notes relating to Consolidated Financial Statements

(Notes relating to Consolidated Balance Sheets) FY2011

(As of Dec. 31, 2011) FY2012

(As of Dec. 31, 2012)

*1 The following pertains to non-consolidated subsidiaries and affiliates.

Investment securities 1,434 million yen

*1 The following pertains to non-consolidated subsidiaries and affiliates.

Investment securities 1,519 million yen *2 As the fiscal year-end fell on a holiday for financial institutions,

notes receivable with maturity dates on the fiscal year-end date were cashed on a subsequent settlement date. The following amount of notes receivable with maturity dates on the fiscal year-end date was included in the balance of notes receivable at fiscal year-end.

Notes receivable 48 million yen

*2 As the fiscal year-end fell on a holiday for financial institutions,

notes receivable with maturity dates on the fiscal year-end date were cashed on a subsequent settlement date. The following amount of notes receivable with maturity dates on the fiscal year-end date was included in the balance of notes receivable at fiscal year-end.


(Notes relating to Consolidated Statements of Income)

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012 to Dec. 31, 2012

*1 Main components of selling, general and administrative expenses for fiscal year 2011:

1 Salaries and wages 10,693 million yen2 Advertising and sales promotion expenses 6,408 million yen

*1 Main components of selling, general and administrative expenses for fiscal year 2012:

1 Salaries and wages 11,532 million yen2 Advertising and sales promotion expenses 6,996 million yen

*2 R&D expenses included in selling, general and administrative expenses and manufacturing expenses for fiscal year 2011:

10,021 million yen

*2 R&D expenses included in selling, general and administrative expenses and manufacturing expenses for fiscal year 2012: 10,245 million yen

(Notes relating to Consolidated Statement of Shareholders’ Equity)

FY2011 (From Jan. 1, 2011 to Dec. 31, 2011) 1. Total number of issued shares (Thousand shares)

Class of shares Balance of

Dec. 31, 2010 Increase Decrease

Balance as of Dec. 31, 2011

Common stock 93,800 －－ 93,800

2. Treasury stock (Thousand shares)

Class of shares Balance of

Dec. 31, 2010 Increase Decrease

Balance as of Dec. 31, 2011

Common stock 31 0 0 32

(Details of the change) Details of the increase in the number of shares are as follows:

Acquisition of fractional shares 0 thousand sharesDetails of the decrease in the number of shares are as follows:

Sale of fractional shares 0 thousand shares


19

3. Dividends

(1) Payment of cash dividends

Resolution Class of shares

Total amount of cash dividends

(Millions of yen)

Cash dividends per share (Yen) Record date Effective date

General Meeting of Shareholders held on Mar. 30, 2011

Common stock

2,859 30.50 Dec. 31, 2010 Mar. 31, 2011

Meeting of the Board of Directors held on Jul. 27, 2011

Common stock

2,859 30.50 Jun. 30, 2011 Sep. 2, 2011

(2) Dividends with record date within the current fiscal year and effective in the next fiscal year


Source of dividends


(Millions of yen)



Common stock

Retainedearnings

2,859 30.50 Dec. 31, 2011 Mar. 30, 2012

FY2012 (From Jan. 1, 2012 to Dec. 31, 2012) 1. Total number of issued shares (Thousand shares)

Class of shares Balance as of Dec. 31, 2011

Increase Decrease Balance as of Dec. 31, 2012

Common stock 93,800 － 1,080 92,720

(Details of the change) Details of the decrease in the number of shares are as follows:

Retirement of treasury stock 1,080 thousand shares 2. Treasury stock (Thousand shares)

Class of shares Balance as of Dec. 31, 2011

Increase Decrease Balance as of Dec. 31, 2012

Common stock 32 1,060 1,080 13

(Details of the change) Details of the increase in the number of shares are as follows:

Acquisition in accordance with the resolution at the meeting of the Board of Directors 1,060 thousand sharesAcquisition of fractional shares 0 thousand shares

Details of the decrease in the number of shares are as follows: Retirement of treasury stock 1,080 thousand sharesSale of fractional shares 0 thousand shares

3. Dividends

(1) Payment of cash dividends



(Millions of yen)



Common stock 2,859 30.50 Dec. 31, 2011 Mar. 30, 2012

Meeting of the Board of Directors held on Jul. 31, 2012

Common stock 3,476 37.50 Jun. 30, 2012 Sep. 4, 2012

(2) Dividends with record date within the current fiscal year and effective in the next fiscal year


Source of dividends


(Millions of yen)



Common stock

Retainedearnings

3,476 37.50 Dec. 31, 2012 Mar. 29, 2013


20

(Notes relating to Consolidated Statements of Cash Flows)

FY2011 Jan, 1, 2011

to Dec. 31, 2011

FY2012 Jan, 1, 2012

to Dec. 31, 2012 * Reconciliation between cash and cash equivalents at the end

of the year and the accounts in the consolidated balance sheets (as of Dec. 31, 2011)

* Reconciliation between cash and cash equivalents at the end of the year and the accounts in the consolidated balance sheets (as of Dec. 31, 2012)

(Millions of yen)Cash and time deposits 82,252Time deposits with maturities exceeding three months (3,703)

Cash and cash equivalents 78,549

(Millions of yen)Cash and time deposits 94,950Time deposits with maturities exceeding three months (141)

Cash and cash equivalents 94,809

(Notes relating to Securities)

FY2011 (As of Dec. 31, 2011)

Other securities (Millions of yen)

Item Book value Acquisition cost Difference

Securities for which the amount recorded on the consolidated balance sheet exceeds acquisition cost

(1) Stock 1,540 502 1,038

Subtotal 1,540 502 1,038

Securities for which the amount recorded on the consolidated balance sheet does not exceed acquisition cost

(1) Stock 3,518 4,597 (1,078)

Subtotal 3,518 4,597 (1,078)

Total 5,059 5,099 (40)

FY2012 (As of Dec. 31, 2012)

Other securities (Millions of yen)

Item Book value Acquisition cost Difference

Securities for which the amount recorded on the consolidated balance sheet exceeds acquisition cost

(1) Stock 5,627 3,689 1,938

Subtotal 5,627 3,689 1,938

Securities for which the amount recorded on the consolidated balance sheet does not exceed acquisition cost

(1) Stock 1,173 1,710 (537)

Subtotal 1,173 1,710 (537)

Total 6,801 5,399 1,401


21

(Notes relating to Deferred Tax Accounting) FY2011

(As of Dec. 31, 2011) FY2012

(As of Dec. 31, 2012) 1. Significant components of deferred tax assets and liabilities

(Millions of yen)(Deferred tax assets)

Excess of limit of accrued employee bonuses 178

Enterprise tax payable 166

Officer retirement benefits 431

Excess of limit of employee retirement benefits 835

Unrealized loss on other securities 295

Book in excess of tax depreciation 65

Unrealized gain of inventories 687

Loss on revaluation of other securities 675

Loss on revaluation of golf memberships 135

Excess of limit of allowance for doubtful accounts 385

Loss on impairment 264

Book in excess of tax depreciation for small sum assets 197

Devaluation loss on inventories 434

Others 763

Sub-total deferred tax assets 5,519

Valuation allowance (1,665)

Total deferred tax assets 3,853(Deferred tax liabilities)

Undistributed earnings of consolidated subsidiaries (26)

Reserve for special depreciation (1,112)

Unrealized gain on other securities (373)

Others (72)

Total deferred tax liabilities (1,585)

Net deferred tax assets 2,267

1. Significant components of deferred tax assets and liabilities (Millions of yen)

(Deferred tax assets)

Excess of limit of accrued employee bonuses 204

Enterprise tax payable 281

Officer retirement benefits 270 Excess of limit of employee retirement benefits 913

Unrealized loss on other securities 95

Book in excess of tax depreciation 59

Unrealized gain of inventories 883

Loss on revaluation of other securities 663

Loss on revaluation of golf memberships 150

Excess of limit of allowance for doubtful accounts 381

Loss on impairment 252

Book in excess of tax depreciation for small sum assets 204 Devaluation loss on inventories 423

Others 733

Sub-total deferred tax assets 5,518

Valuation allowance (1,531)

Total deferred tax assets 3,987(Deferred tax liabilities)

Undistributed earnings of consolidated subsidiaries (35)

Reserve for special depreciation (942) Unrealized gain on other securities (651)

Others (32)

Total deferred tax liabilities (1,661)

Net deferred tax assets 2,326

2. Reconciliation between the effective statutory tax rate and the actual effective tax rate

(%)Effective statutory tax rate 41.0

(Reconciliation)

Permanent difference-expenses 3.4

Permanent difference-income (1.7)

Tax credit (2.6)

Differences in tax rates for foreign subsidiaries (11.6)

Valuation allowance 2.0

Dividend income from consolidated subsidiaries 0.6 Adjustment of deferred tax assets due to change

in effective statutory tax rates 1.3

Other 0.1

Actual effective tax rate 32.5


(%)Effective statutory tax rate 41.0

(Reconciliation)

Permanent difference-expenses 2.0

Permanent difference-income (1.4)

Tax credit (2.0) Differences in tax rates for foreign subsidiaries (11.7) Valuation allowance (0.5) Adjustment of deferred tax assets due to change


Other 0.9

Actual effective tax rate 28.4


22

FY2011

(As of Dec. 31, 2011) FY2012

(As of Dec. 31, 2012) 3. Adjustment of deferred tax assets and liabilities due to change in effective statutory tax rates

The “Act for Partial Amendment of the Income Tax Act etc., for the Purpose of Creating a Taxation System responding to Changes in Economic and Social Structures” (Act No. 114 of 2011) and the “Act on Special Measures for Securing Financial Resources Necessary for Reconstruction from the Great East Japan Earthquake” (Act No. 117 of 2011) were promulgated on December 2, 2011 and corporation tax rates will be changed for the fiscal years beginning on or after April 1, 2012.

The Company and its domestic subsidiaries changed the effective statutory tax rate used to measure deferred tax assets and liabilities from 41% to 38% for temporary differences expected to be eliminated in the fiscal years beginning on or after January 1, 2013, and from 41% to 36% for temporary differences expected to be eliminated in the fiscal years beginning on or after January 1, 2016.

As a result of this change, the net amount of deferred tax assets (net of deferred tax liabilities) as of December 31, 2011 decreased 375 million yen, and deferred income taxes and unrealized gain (loss) on other securities recognized for fiscal year 2011 increased 386 million yen and 10 million yen, respectively.

―――


23

(Segment Information)

1. Overview of reportable segments The reportable segments of the Company are those units for which separate financial information is available, and which are regularly examined by the Board of Directors concerning decisions on the allocation of management resources and for assessing business performance. The Company operates through the three divisions of Bicycle Components, Fishing Tackle and Others. Principal products of each reportable segment are listed below.

Reportable segment Principal products Bicycle Components Freewheels, front gears, derailleurs, brakes, etc. Fishing Tackle Reels, rods, etc. Others Cold forged products, etc.

2. Basis for calculating sales, income (loss), assets, liabilities and other items by reportable segment Accounting methods applied for calculation of sales, income (loss), assets, liabilities, and other items by reportable segment correspond to information presented under “(6) Preparation of the Consolidated Financial Statements - Significant Matters.” Segment income is based on operating income. 3. Information on sales, income (loss), assets, liabilities and other items by reportable segment

FY2011 (Jan. 1, 2011 - Dec. 31, 2011) (Millions of yen)

Reportable Segment

Adjustment Consolidated

Financial Statements

Bicycle Components

Fishing Tackle

Others Total

Net sales

1) Third parties 177,307 43,884 578 221,770 － 221,770

2) Inter-segment －－－－－－

Total 177,307 43,884 578 221,770 － 221,770

Segment income (loss) 29,966 2,139 (363) 31,742 － 31,742

Segment assets 76,015 24,165 1,052 101,233 114,766 216,000Other items

Depreciation and amortization 8,226 1,362 73 9,662 － 9,662

Amortization of goodwill 200 62 － 263 － 263

Increase in property, plant and equipment and intangible assets 8,466 1,086 20 9,573 3,479 13,052

Notes: 1. Segment assets adjustment was 114,766 million yen, the main items of which were surplus funds (cash and deposits) and corporate assets. The expenses such as depreciation and amortization related to property, plant and equipment and intangible assets classified in Adjustment, have been allocated to each reportable segment.

2. There is no difference between total segment income and operating income in the consolidated statements of income.


24

FY2012 (Jan. 1, 2012 - Dec. 31, 2012) (Millions of yen)

Reportable Segment

Adjustment Consolidated

Financial Statements

Bicycle Components Fishing Tackle Others Total

Net sales

1) Third parties 198,190 47,234 419 245,843 － 245,843

2) Inter-segment －－－－－－

Total 198,190 47,234 419 245,843 － 245,843

Segment income (loss) 39,012 2,274 (326) 40,961 － 40,961

Segment assets 99,367 25,867 769 126,003 131,703 257,707Other items Depreciation and amortization 8,449 1,484 43 9,977 － 9,977

Amortization of goodwill 182 62 － 245 － 245

Increase in property, plant and equipment and intangible assets 13,359 1,550 6 14,916 7,913 22,829

Notes: 1. Segment assets adjustment was 131,703 million yen, the main items of which were surplus funds (cash and deposits) and corporate assets. The expenses such as depreciation and amortization related to property, plant and equipment and intangible assets classified in Adjustment, have been allocated to each reportable segment.

2. There is no difference between total segment income and operating income in the consolidated statements of income.

Related information Information by geographical area

Net sales FY2011 (Jan. 1, 2011 - Dec. 31, 2011) (Millions of yen)

Japan North America Europe Asia Other Total

27,782 26,093 80,513 78,081 9,299 221,770Note: Net sales are classified by countries and regions according to customer location.

FY2012 (Jan. 1, 2012 - Dec. 31, 2012) (Millions of yen) Japan North America Europe Asia Other Total

29,569 29,454 84,643 88,991 13,184 245,843Note: Net sales are classified by countries and regions according to customer location.


25

(Per Share Data)

FY2011 Jan. 1, 2011

to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012

Net assets per share 1,932.32 yenNet income per share 211.83 yen

Diluted net income per share is not presented because there were no securities with dilutive effect.

Net assets per share 2,326.13 yenNet income per share 296.50 yen

The same as at left

Basis for calculation of net income per share

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012 Net income 19,862 27,487 Net income attributable to common stock 19,862 27,487 Amount not attributable to common shareholders －－

Average number of shares of common stock outstanding (thousand shares) 93,768 92,707

Disclosure of notes relating to derivative transactions, lease transactions, employee retirement benefits, financial instruments, immovable property and business combinations has been omitted because such disclosure in the Summary of Financial Results is considered to be unnecessary. Stock options or related party transactions are not applicable.

(Significant Subsequent Events) FY2011 (Jan. 1, 2011 - Dec. 31, 2011)

Acquisition of treasury stock (1) Resolution and its purpose

The Company has resolved at the Meeting of the Board of Directors held on January 17, 2012 to acquire its own shares. The purpose is to improve capital efficiency and make possible the implementation of an expeditious capital policy adapted to the business environment.

(2) Number and value of share to be acquired Number of share to be acquired: Not exceeding 1,100,000 shares Value of shares to be acquired: Not exceeding 4,200 million yen

(3) Period During one year from January 18, 2012 to January 24, 2012

(4) As a result of ongoing acquisition of treasury stock based on the resolution of the Meeting of the Board of Directors held on January 17, 2012, the Company acquired its own shares in the market on January 18, 2012. The total number of shares acquired was 1,060,000 and the acquisition cost was 3,858,400 thousand yen.

FY2012 (Jan. 1, 2012 - Dec. 31, 2012) Not applicable.


26

5. Non-consolidated Financial Statements

(1) Non-consolidated Balance Sheets (Millions of yen)

FY2011 As of Dec. 31, 2011

FY2012 As of Dec. 31, 2012

Assets

Current assets

Cash and time deposits 21,728 16,508 Notes receivable * 1,054 * 1,191 Accounts receivable-trade 18,081 19,443 Finished goods 4,969 4,865 Work in process 8,219 8,235 Raw materials and supplies 1,637 1,387 Accounts receivable-other 2,195 3,783 Deferred income taxes 639 748 Others 1,035 1,155 Allowance for doubtful accounts (112) (124) Total current assets 59,449 57,196 Fixed assets

Property, plant and equipment

Buildings 20,280 26,079 Accumulated depreciation (12,792) (12,518) Accumulated impairment loss (140) (140) Buildings (net) 7,347 13,420 Structures 2,498 2,614 Accumulated depreciation (2,104) (2,076) Accumulated impairment loss (1) (1) Structures (net) 392 536 Plant and machinery 18,576 20,375 Accumulated depreciation (15,004) (15,338) Accumulated impairment loss (191) (173) Plant and machinery (net) 3,380 4,862 Vehicles 172 173 Accumulated depreciation (125) (111) Vehicles (net) 47 62 Tools, equipment and furniture 25,071 25,738 Accumulated depreciation (23,101) (23,280) Accumulated impairment loss (21) (17) Tools, equipment and furniture (net) 1,949 2,439 Land 9,816 9,804 Leased assets 40 43 Accumulated depreciation (26) (30) Leased assets (net) 14 13 Construction in progress 3,056 1,806 Total property, plant and equipment 26,005 32,946 Intangible assets

Software 1,315 1,364 Others 244 278 Total intangible assets 1,559 1,642


27

(Millions of yen)

FY2011 As of Dec. 31, 2011

FY2012 As of Dec. 31, 2012

Investments and other assets

Investment securities 4,608 6,348 Subsidiaries’ and affiliates’ stock 12,117 12,117 Long-term loans to subsidiaries and affiliates 4,392 4,025 Deferred income taxes 1,352 860 Others 1,978 2,076 Allowance for doubtful accounts (1,075) (1,071) Total investments and other assets 23,373 24,357 Total fixed assets 50,938 58,946 Total assets 110,387 116,142Liabilities

Current liabilities

Accounts payable-trade 8,519 10,491 Accounts payable-other 3,959 4,353 Income taxes payable 1,152 3,146 Deposit payable 4,278 5,039 Accrued employee bonuses 230 232 Accrued officer bonuses 140 164 Others 482 541 Total current liabilities 18,763 23,969 Long-term liabilities

Employee retirement benefits 2,186 2,169 Officer retirement benefits 1,120 －

Others 113 757 Total long-term liabilities 3,419 2,927 Total liabilities 22,182 26,896(Net assets)

Shareholders’ equity

Common stock 35,613 35,613 Capital surplus

Capital reserve 5,822 5,822 Other capital surplus 0 －

Total capital surplus 5,822 5,822 Retained earnings

Legal reserve 3,194 3,194 Other retained earnings

Unappropriated retained earnings 43,559 43,557 Total retained earnings 46,753 46,751 Treasury stock (124) (47) Total shareholders’ equity 88,065 88,139 Valuation and transaction adjustments

Unrealized gain (loss) on other securities 139 1,106 Total valuation and transaction adjustments 139 1,106 Total net assets 88,204 89,246 Total liabilities and net assets 110,387 116,142


28

(2) Non-consolidated Statement of Income

(Millions of yen)

FY2011

Jan. 1, 2011 to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012 Net sales 172,453 191,551Cost of sales

Beginning balance of finished goods 4,462 4,969 Purchases of finished goods 66,059 85,503 Cost of products manufactured *2 66,556 *2 64,604 Total 137,078 155,076 Transfer to other accounts 726 765 Ending balance of finished goods 4,969 4,865 Total cost of sales 131,381 149,446Gross profit 41,071 42,105Selling, general and administrative expenses *2 28,355 *2 29,004Operating income 12,715 13,101Non-operating income

Interest income 369 336 Dividend income *1 9,024 *1 1,689 Foreign exchange gains － 1,418 Others 220 460 Total non-operating income 9,614 3,904Non-operating expenses

Interest expenses 55 97 Payment discounts 167 170 Donations 271 143 Foreign exchange losses 1,093 －

Others 241 180 Total non-operating expenses 1,830 591Ordinary income 20,500 16,414Extraordinary losses

Loss on revaluation of investment securities 1,430 －

Loss on factory reconstruction 715 1,076 Total extraordinary losses 2,145 1,076Income before income taxes 18,354 15,338Income tax-current 4,291 5,159Income tax-deferred 551 (95)Total income taxes 4,843 5,063Net income 13,511 10,274


29

(3) Non-consolidated Statements of Shareholders’ Equity (Millions of yen)

FY 2011

Jan. 1, 2011 to Dec. 31, 2011

FY 2012 Jan. 1, 2012 to Dec. 31, 2012

Shareholders’ equity

Common stock

Balance at beginning of year 35,613 35,613 Balance at end of year 35,613 35,613 Capital surplus

Capital reserve

Balance at beginning of year 5,822 5,822 Balance at end of year 5,822 5,822 Other capital surplus

Balance at beginning of year － 0 Changes of items during the year

Sales of treasury stock 0 0 Retirement of treasury stock － (0) Total changes of items during the year 0 (0) Balance at end of year 0 －

Total capital surplus

Balance at beginning of year 5,822 5,822 Changes of items during the year

Sales of treasury stock 0 0 Retirement of treasury stock － (0) Total changes of items during the year 0 (0) Balance at end of year 5,822 5,822 Retained earnings

Legal reserve

Balance at beginning of year 3,194 3,194 Balance at end of year 3,194 3,194 Other retained earnings

Unappropriated retained earnings


Cash dividends paid (5,719) (6,336) Net income 13,511 10,274 Retirement of treasury stock － (3,939) Total changes of items during the year 7,791 (2) Balance at end of year 43,559 43,557 Total retained earnings


Cash dividends paid (5,719) (6,336) Net income 13,511 10,274 Retirement of treasury stock － (3,939) Total changes of items during the year 7,791 (2) Balance at end of year 46,753 46,751


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(Millions of yen)

FY 2011

Jan. 1, 2011 to Dec. 31, 2011

FY 2012 Jan. 1, 2012 to Dec. 31, 2012

Treasury stock

Balance at beginning of year (121) (124) Changes of items during the year

Acquisition of treasury stock (2) (3,863) Sales of treasury stock 0 0 Retirement of treasury stock － 3,939 Total changes of items during the year (2) 76 Balance at end of year (124) (47) Total shareholders' equity


Cash dividends paid (5,719) (6,336) Net income 13,511 10,274 Acquisition of treasury stock (2) (3,863) Sales of treasury stock 0 0 Retirement of treasury stock －－

Total changes of items during the year 7,789 74 Balance at end of year 88,065 88,139Valuation and translation adjustments

Unrealized gain on other securities

Balance at beginning of year (100) 139 Changes of items during the year

Net changes of items other than shareholders’ equity 239 967 Total changes of items during the year 239 967 Balance at end of year 139 1,106 Total valuation and translation adjustments

Balance at beginning of year (100) 139 Changes of items during the year

Net changes of items other than shareholders’ equity 239 967 Total changes of items during the year 239 967 Balance at end of year 139 1,106Total net assets


Cash dividends paid (5,719) (6,336) Net income 13,511 10,274 Acquisition of treasury stock (2) (3,863) Sales of treasury stock 0 0 Net changes of items other than shareholders’ equity 239 967 Total changes of items during the year 8,028 1,041 Balance at end of year 88,204 89,246


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(4) Note concerning Assumption of Going Concern Not applicable.

(5) Changes in the Significant Accounting Policies

FY 2011 Jan. 1, 2011

to Dec. 31, 2011

FY 2012 Jan. 1, 2012

to Dec. 31, 2012 (Adoption of the “Accounting Standards for Asset Retirement Obligations”) Effective from fiscal year 2011, the Company has adopted the “Accounting Standard for Asset Retirement Obligations” (Accounting Standards Board of Japan (ASBJ) Statement No. 18, March 31, 2008) and the “Guidance on Accounting Standard for Asset Retirement Obligations” (ASBJ Guidance No. 21, March 31, 2008). The impact of this change on the non-consolidated financial statements is immaterial. (Adoption of the “Accounting Standards for Business Combinations” and related matters) Effective from fiscal year 2011, the Company has adopted the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, December 26, 2008), the “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, December 26, 2008), the “Partial Amendments to Accounting Standard for Research and Development Costs” (ASBJ Statement No. 23, December 26, 2008), the “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, December 26, 2008), the “Accounting Standard for Equity Method of Accounting for Investments” (ASBJ Statement No. 16, December 26, 2008) and the “Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, December 26, 2008).

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Additional information

FY 2011 Jan. 1, 2011

to Dec. 31, 2011

FY 2012 Jan. 1, 2012

to Dec. 31, 2012

―――

―――

(Adoption of “Accounting Standard for Accounting Changes and Error Corrections” and related matters) The Company has adopted the “Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Statement No. 24, December 4, 2009) and the “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24, December 4, 2009) for accounting changes and error corrections made after the beginning of fiscal year 2012. (Abolition of the Officer Retirement Benefit Plan) The Company has resolved at the General Meeting of Shareholders held on March 29, 2012 to abolish the officer retirement benefit plan and grant the retirement benefits. Accordingly, the officer retirement benefits payable amounting to 649 million yen is presented in “Others” under “Long-term liabilities”.


32

(6) Notes relating to Non-consolidated Financial Statements (Notes relating to Non-consolidated Balance Sheets)

FY2011 (As of Dec. 31, 2011)

FY2012 (As of Dec. 31, 2012)

As the fiscal year-end fell on a holiday for financial institutions, notes receivable with maturity dates on the fiscal year-end date were cashed on a subsequent settlement date. The following amount of notes receivable with maturity dates on the fiscal year-end date was included in the balance of notes receivable at fiscal year-end.


As the fiscal year-end fell on a holiday for financial institutions, notes receivable with maturity dates on the fiscal year-end date were cashed on a subsequent settlement date. The following amount of notes receivable with maturity dates on the fiscal year-end date was included in the balance of notes receivable at fiscal year-end.


(Notes relating to Non-consolidated Statements of Income)

FY2011 Jan. 1, 2011

to Dec. 31, 2011

FY2012 Jan. 1, 2012

to Dec. 31, 2012 *1 Dividend income from affiliated companies amounted to 8,882

million yen.

*1 Dividend income from affiliated companies amounted to 1,548 million yen.

*2 R&D expenses included in selling, general and administrative expenses and manufacturing expenses amounted to 9,192 million yen.

*2 R&D expenses included in selling, general and administrative expenses and manufacturing expenses amounted to 9,288 million yen.

(Notes relating to Deferred Tax Accounting)

FY2011 (As of Dec. 31, 2011)

FY2012 (As of Dec. 31, 2012)


(Deferred tax assets) Excess of limit of accrued employee bonuses 94Enterprise tax payable 131Officer retirement benefits 403Excess of limit of employee retirement benefits 787Unrealized gain on other securities 295Loss on revaluation of other securities 675Book in excess of tax depreciation 60Loss on revaluation of golf memberships 135Excess of limit of allowance for doubtful accounts 383Loss on impairment 264Book in excess of tax depreciation 196Devaluation loss on inventories 278Others 322Sub-total deferred tax assets 4,030Valuation allowance (1,665)Total deferred tax assets 2,364(Deferred tax liabilities) Unrealized gain on other securities (373)Total deferred tax liabilities (373)Net deferred tax assets 1,991


(Deferred tax assets) Excess of limit of accrued employee bonuses 88Enterprise tax payable 247Officer retirement benefits 233Excess of limit of employee retirement benefits 780Unrealized gain on other securities 95Loss on revaluation of other securities 663Book in excess of tax depreciation 14Loss on revaluation of golf memberships 150Excess of limit of allowance for doubtful accounts 381Loss on impairment 252Book in excess of tax depreciation 206Devaluation loss on inventories 337Others 303Sub-total deferred tax assets 3,757Valuation allowance (1,496)Total deferred tax assets 2,260(Deferred tax liabilities) Unrealized gain on other securities (651)Total deferred tax liabilities (651)Net deferred tax assets 1,609


33

FY2011 (As of Dec. 31, 2011)

FY2012 (As of Dec. 31, 2012)


(%)Effective statutory tax rate 41.0(Reconciliation) Permanent difference-expenses 3.6 Permanent difference-income (19.0) Tax credit (4.1) Valuation allowance 3.1 Adjustments of previous year 0.1 Adjustments of deferred tax assets due to change


Others (0.4)Actual effective tax rate 26.4


(%)Effective statutory tax rate 41.0(Reconciliation) Permanent difference-expenses 1.1Permanent difference-income (4.2)Tax credit (4.8)Valuation allowance (1.1)Adjustments of previous year 1.0Others (0.0)Actual effective tax rate 33.0

3. Adjustment of deferred tax assets and liabilities due to change in effective statutory tax rates The “Act for Partial Amendment of the Income Tax Act etc., for the Purpose of Creating a Taxation System responding to Changes in Economic and Social Structures” (Act No. 114 of 2011) and the “Act on Special Measures for Securing Financial Resources Necessary for Reconstruction from the Great East Japan Earthquake” (Act No. 117 of 2011) were promulgated on December 2, 2011 and corporation tax rates will be changed for the fiscal years beginning on or after April 1, 2012. The Company changed the effective statutory tax rate used to measure deferred tax assets and liabilities from 41% to 38% for temporary differences expected to be eliminated in the fiscal years beginning on or after January 1, 2013, and from 41% to 36% for temporary differences expected to be eliminated in the fiscal years beginning on or after January 1, 2016. As a result of this change, the net amount of deferred tax assets (net of deferred tax liabilities) as of December 31, 2011 decreased 370 million yen, and deferred income taxes and unrealized gain (loss) on other securities recognized for fiscal year 2011 increased 381 million yen and 10 million yen, respectively.

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summary of consolidated financial results for fy2012 · 2017-03-17 · 1．consolidated financial...

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